A major problem arising in airline alliances is to design
allocation mechanisms determining how the revenue of a product
should be shared among the airlines. The nucleolus is a concept of
cooperative game theory that provides solutions for allocating the
cost or benefit of a cooperation. This work provides fair revenue
proportions for the airline alliances based on the nucleolus, which
assumes a centralized decision making system. The proposed
mechanism is used as a benchmark to evaluate the fairness of the
revenue sharing mechanisms, where the alliance partners behave
selfishly. Additionally, a new selfish revenue allocation rule is
developed that improves the performance of the existing methods.
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